Do you need charter capital to set up a limited company in Vietnam?
Nowadays, many individuals and organizations invest and open businesses to make a profit. In order to set up a company, you have to register your business with the Business Registration Office. One of the contents to declare when carrying out the company establishment registration procedure is the charter capital. In this article, LSX legal firm will help you to answer the question: “Do you need charter capital to set up a limited company in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 47/2021/ND-CP
Do you need charter capital to set up a company?
Charter capital is one of the types of capital that needs to be prepared when establishing a new company. This type of capital contributed by members or shareholders of the company or committed to contributing to the enterprise upon its establishment for a certain period of time.
The Law on Enterprises stipulates that when establishing an enterprise, all companies must declare and register an appropriate level of charter capital before they can register their business. Therefore, founders can not establish a company without charter capital.
How much capital do you need to establish a limited company?
The current Law on Enterprise does not stipulate the required level of charter capital that a limited company needs to register upon its establishment (except in the case of a company dealing in lines of business with regulated capital and margin). Therefore, founders can freely choose the level of charter capital for their company accordingly.
In the case of a limited liability company operates business in industries that require legal capital (for example, security services, banking, insurance, …) or require a deposit (such as film production service, debt collection, etc.), the charter capital that the company must register upon its establishment must equal or more than the legal capital or deposit as prescribed.
Contribute to the charter capital of the limited company
The members of the company decide how much charter capital to establish a limited company by contributing their own capital to the company. Members will have to contribute such capital contribution correctly and fully as committed within 90 days from the date the limited company granted the Certificate of Business Registration.
Company members are only allowed to contribute their capital contribution to the limited company with assets other than those as committed if they are approved by the majority of other members in the company. During this period, members will have the rights and obligations corresponding to their contributed capital as committed to contributing.
Conditions when establishing a company
Conditions on subject
For business owners as Vietnamese citizens or foreigners residing in Vietnam:
- Enterprises.
- Organizations and individuals wishing to establish a company.
For foreign traders whose nationality is a member of the WTO:
- Establishment of a joint venture company in Vietnam.
- 100% foreign invested company.
- Enterprises establish branches and representative offices in Vietnam.
Conditions on company name
- The Vietnamese name of an enterprise shall contain two elements in order:
- The type of enterprise;
- The proper name.
- The type of enterprise shall be “công ty trách nhiệm hữu hạn” or “công ty TNHH” for limited liability companies; “công ty cổ phần” or “công ty CP” for joint stock companies; “công ty hợp danh” or “công ty HD” for partnerships; “doanh nghiệp tư nhân”, “DNTN” or “doanh nghiệp TN” for sole proprietorships.
- The proper name shall consist of letters in the Vietnamese alphabet, the letters F, J, Z, W, numbers, and symbols.
- The enterprise’s name displayed at the headquarters, branches, representative offices, and business locations of the enterprise and printed or written on transaction documents, records, and printed materials published by the enterprise.
Prohibited acts of naming enterprises
- Firstly, use of any name that is identical or confusingly similar to another enterprise’s name that is registered in accordance with Article 41 of the Law on Enterprise 2020.
- Secondly, use of the name of a state authority, the People’s military unit, political organization, socio-political organization, socio-political-professional organization, social organization, or social-professional organization as part or all of an enterprise’s name, unless it is accepted by that authority, unit or organization.
- Thirdly, use of words or symbols that against the country’s history, culture, ethical values, and good traditions.
Conditions on business lines
Enterprises can conduct business lines not prohibited by the law, and have registered business lines with the management agency. They must not conduct business in lines of business that are prohibited from doing business, conduct conditional business lines when the business conditions not fully satisfied as prescribed by the Law on Enterprises and the Law on Investment.
Conditions on business location
The headquarter of the enterprise is the contact point of the enterprise in the territory of Vietnam, the address is determined by house number, alley, street, hamlet, commune, ward, townships, districts, urban districts, towns, provincial cities, provinces, and centrally run cities; phone number, fax number and email (if any).
Conditions on company seal
- The enterprise’s seals can be physical or digital as prescribed by e-transaction laws.
- The enterprise shall decide the type, quantity, design, and content of its seal and the seals of its branches, representative offices, and other units.
- The management and storage of seals shall comply with the company’s charter or regulations of the enterprise, branch, representative office, or unit that owns the seal. Seals shall be used by enterprises in transactions as prescribed by law.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Do you need charter capital to set up a limited company in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
Related articles
- Can retired officials set up a business in Vietnam?
- Procedures for changing transport business license 2022 in Vietnam
- Regulations on alcohol business license in Vietnam
Related questions
Contributed assets include VND, convertible foreign currencies, gold, land use right (LUR), intellectual property rights, technologies, technical secrets, other assets that can be converted into VND.
Only the individual or organization that has the lawful right to ownership or right to use the asset mentioned above may contribute it as capital as prescribed by law.
Firstly, the enterprise’s name and EID number;
Secondly, the enterprise’s headquarters address;
Thirdly, full name, signature, mailing address, nationality and legal document number of the legal representative (for limited liability companies and joint stock companies), each partner (for partnerships), the owner (for sole proprietorships). Full name, mailing address, nationality and legal document number of each member that is an individual; name, EID number and headquarters address of each member that is an organization (for limited liability companies);
Fourthly, the charter capital (or investment capital if the enterprise is a sole proprietorship).
a) The company’s name, addresses of the headquarters, branches and representative offices (if any);
b) The company’s business lines;
c) The charter capital; total quantity of shares, types of shares and face value of each type (for joint stock companies);
d) Full name, mailing address, nationality of each partner (for partnerships), the owner and each member (for limited liability companies) or the founding shareholders (for joint stock companies). Stakes held by each member or partner (for limited liability companies and partnerships) and values thereof. Quantity of shares, types of shares and value of each type held by founding shareholders (for joint stock companies);
dd) Rights and obligations of the members or partners (for limited liability companies and partnerships) or shareholders (for joint stock companies);
e) The organizational structure;
…
Conclusion: So the above is Do you need charter capital to set up a limited company in Vietnam?. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
